Upper Volta - Rural Development Fund Project

RESTRICTED Report No, PA-127a RETURN TO REPORTS DESK WITHIN NE WEEK _ *U _ _ Ir '9dfEus only by t.e B*nk Gwoup anAt4WalWy skutloie cxpnahion atWM pe my not be publse, quoted ot cltd thout 9&nk Group outhoriabon. Ihc Itnk Gaoup dos not accp rpodbWit fot the c:umrcy or the tport. 1NTERNATIONAL BANK FO RECONSTRUMIION AND DEVELOPMENT INTERNATIONAL EVELOPMO ASSOCIATION APPRAISAL OF A RURAL DEVELOPMENT FUND PROJECT UPPER VOLTA May 16, 1972 Agriculture Projects Department  RETURN TO REPORTS DESK ROOL4z A - ^~ 2MV9*e EOUIVALUT1S us$v * CFAN 255.79 (previously CFIA 277.71) QZAF 1 - S$0.004 CIFA IiliUon U JS$3.909 W-N I.TS AR WES metric System BtZhD - Baque Centrale des Etats d'Atrique Occidentale DIVA - Bureau pour la Developpument de la Production Agricole MD - Banque National, d Devloppement CCM - Caisse Ceutrale. de Cooperation Economique MR - Direction du Developpmat Rural CTM - Compeie Francais. pour le Dewloppemnt des Fibres Textiles CIDR - Campane Inteuationale do DIewloppament Rural PAC - loadsl d'Ade et de Cooperation FD - Toods Eurpeen da Developpent - Direction de 1 Uydraique et de 1'Equipemnt Rural OlD - Org0ism Regional de Developpemut MA - IBID's Perena t Mission In Western Africa RW - Rural D e ud SAEC - Societe d Aide Technique et de Cooperation SOTSA- Societe Technique pour le Developpment Agricole FISAL AEAR Jauary 1 - December 31  UPPER VOLTA RURAL DEVELOPMENT FUND PROJECT TABLE OF CONTENTS Page No. SUMMARY AND CONCLUSIONS ...... .................... i-iii I. INTROIDUCTION .............................. ............ I II. BACKGROUND .................................. 1 A. General .* *.*........................................... 1 B. Agricultural Sector ........ .. ......I...*......... . 2 C. Rural Development Institutions ................... 4 D. Foreign Aid for Rural Development ................ 7 III. THE PROJECT ...............................a... *..s .... 7 A. General ............... .... . ................. 7 B. Sub-project Classes and Features ..............s... 8 IV. COST ESTIMATES AND FINANCIAL ARRANGEMENTS ............. 11 A. Project Costs ......... .... 11 B. Proposed Financing ..... . ............ ...... 13 C. Procurement and Disbursement 14 D. Accounts and Audit .......... ... 14 E. Recovery of Project Cost . ... 15 V. ORGANIZATION AND MANAGEMENT ........................... 15 A. General.. 15 B. Selection of Sub-projects and Sub-project Participants ............ 17 C. Management and Maintenance of Sub-projects ....... 19 D. Coordination with other Aid Donors 20 VI. ECONOMIC BENEFITS AND JUSTIFICATION ................... 20 VII. AGREEMENTS REACHED AND IECOMMEDATON ................. 23 This report is based on the findings of an IDA appraisal mission composed of Messrs K.H.S. Haasjes, D. Elz and A. Meimaris (IDA), and P. Betsche and A. Duncan (PMWA) which visited Upper Volta in August, 1971.  -2- ANNEXES 1. Data on the West Volta Cotton Project Table 1 Production of Cotton in Upper Volta and Project Area in 1969, 1970 and 1971 2. Table 1 Village Size Distribution and Typical Cropping Pattern of a 60-Farm Village in a Cotton Growing Area 2 Estimate of Cultivated Area, Production and Yield per Hectare 3 Organismes Regionaux de Developpement (ORD) 3. Agricultural Exports (1962-1970) 4. Banque Nationale de Developpement (BND) Table 1 Condensed Balance Sheets 2 Loan Portfolio (1965-1970) 3 Projections of Finance Requirements 4 Condensed Profit and Loss Accounts 5 Bad Debts 6 Repayment of Short and Medium-Term Loans by ORD 5. Foreign Aid for Rural Development 6. Existing and Required Wells by Areas 7. Construction Program for Village Stores 8. Improvements of Feeder Roads Table 1 Economic Rate of Return Calculation 9. Project !Costs, Table 1 Summary of Estimated Project Costs by Years 2 Staff, Vehicle, Equipment Requirements and Operating Costs for Project Management Staff 3 Construction Costs for 500 Wells 4 Construction Costs for 700 Small Warehouses 5 Development Costs for Bas Fonds (1,500 ha) 6 Cost of Erosion Control (1,000 ha) 7 Construction Costs for Small Irrigation Works (200 ha) 8 Cost for Improvement of 300 km of Feeder Roads 9 Summary of Contingencies 10 Summary of Duties and Taxes 10. Financing and Disbursement Table 1 Project Financing 2 Disbursement of IDA Credit 3 Estimated Schedule of Disbursement  - 3 - 11. Responsibilities of RDF Management Staff 12. Technical Committee 13. Economic Rate of Return Calculations Table 1 Weighted Average Economic Rate of Return for Agricultural Sub-projects 2 Construction Schedule for Sub-projects 3 Yearly Incremental or New Production from Sub-projects 4 Economic Rate of Return for 500 Wells 5 Economic Rate of Return for 700 Stores 6 Increase in Cotton Output per Village through Improved Storage of Inputs 7 Economic Rate of Return for 1,500 ha Bas Fond Rice Cultivation 8 Production Costs and Income per Hectare of Paddy on Bas Fond 9 Economic Rate of Return for 1,000 ha Erosion Control 10 Development and Income Schedule for 1,000 ha Erosion Control 11 Economic Rate of Return for Small Irrigation Schemes (200 ha Rice) 12 Production Costs and Income for one Hectare Paddy with Irrigation 14. Stumary of Selected Project Data CHART Organization of Project MAPS 1. Rainfall and Crops 2. Density of Land Use 3. Regional DeveloFent Organizations (ORD) and Administrative Units   UPPER VOLTA RURAL DEVELOPMENT FUND PROJECT SUMMARY AND CONCLUSIONS i. This report appraises a project involving a large number of small scale rural development activities designed to increase the agricultural production and to improve the income and health of rural communities. Between 300,000 and 450,000 people would be influenced by the project which would include the following components: constructing about 500 wells for domestic water supplies and about 700 village warehouses for storing farm inputs; developing some 190 small land and water development sub-projects - drainage and water control of swampy depressions, irrigation works below existing dams, and soil erosion control; and improving about 270 km of feeder roads. A small provision would be made under the project for sub-projects of other types and associated studies. ii. The objective of the project is to raise rural standards of living through increased production of crops and livestock, reduction of transport costs, and reduced incidence of water-borne diseases. The project would be carried out over the three years 1972/73 through 1974/75, would extend to most parts of the country, and is intended to be the first phase of a larger program of the same type. A general feature of the project would be that sub-projects, except for feeder roads, would be financed only if the rural communities that would benefit from them demonstrated their desire for the sub-projects through providing without compensation all unskilled labor needed for construction. For land and water development schemes farmer groups would be formed and Government would provide agricultural extension, credit, and other technical services to group members. iii. Project costs are estimated at US$3.0 million with a foreign exchange component of 51Z. The major components include about US$847,000 for construc- tion of wells; US$163,000 for warehouses; US$533,000 for land and water development; US$363,000 for feeder road improvement; US$823,000 for manage- ment, design and engineering, and field supervision; and US$238,500 for unidentified studies and sub-projects. .DA would finance 72% of total project costs and Government 15% or US$462,200; the latter would be equi- valent roughly to the amount of duties and taxes included in project costs. The remaining 13% or US$381,300 would be financed by the French Government agencies Fonds d'Aide et de Cooperation (FAC) and Caisse Centrale de Coopera- tion Economique (CCCE). O. the proposed IDA credit of US$2.2 million, 82%- would cover project Zoreign exchange costs and the balance 63% of local currency costs. Farmers would contribute unskilled labor required for construction and maiLitenance of all sub-projects except feeder roads; no allowance has been made for this in project costs. Goods and contracts valued at aoout US$1 million, would be procured following local tendering, since the size of any orders and contracts would be insufficient to attract foreign bids.  - 4-' -